It has been revealed that the Petroleum Industry Bill (PIB) will include low tax provisions to sustain stable investments in Nigeria’s oil sector.
Mr Timipre Sylva who’s currently the Minister of State for Petroleum Resources noted that Nigeria’s plans to step up growth of its oil industry have not been impacted heavily by the coronavirus. He added that key priority projects the country planned to execute in 2020 have not been derailed.
It has been observed that the African nation Nigeria has repeatedly failed to pass the PIB, a bill expected to help reform her oil sector when passed into law.
The PIB is considered relevant to the country’s quest to make its oil industry regain its competitiveness, but it has been stalled by interests and politics.
A new version has been submitted again to the National Assembly for legislative consideration.
“We are not unmindful that the industry players are of the view that the current level of taxation on onshore and shallow water operations is excessive and therefore the proposed PIB should include a significant lowering of these taxes for new investments and for existing operations,” Sylva commented.
“As a government, we have identified major constraints that have delayed recent projects from reaching financial close or caused projects to be delayed and/or abandoned altogether. The PIB before Nigeria’s legislative arm that we propose will, I believe, provide this new framework.”
“To secure the future of the industry in Nigeria, fiscal and other terms must be based on a more conservative economic outlook. A framework must be created for the Nigerian petroleum industry to grow and invest in additional petroleum production even under difficult economic conditions.
“For this reason, we are proposing grandfathering in the new PIB. The proposed PIB framework shall be based on core principles of clarity, dynamism, neutrality, open access and fiscal rules of general application,” he added.
Speaking on the challenges holding back the country’s gas market from transitioning into a competitive stage, Sylva highlighted institutional and structural problems relating to gas production, usage and regulation as key factors.